Katahdin Bankshares Corp. Announces Fourth Quarter Dividend

Katahdin Bankshares Corp. (OTCQB:KTHN), parent company of Katahdin Trust Company, announced that it has declared a cash dividend of $.0975 per share for the fourth quarter of 2012. In making the announcement Jon J. Prescott, Katahdin Trust Company President & CEO stated that it represented an 8.3% increase over last year's fourth quarter dividend. The dividend will be payable on December 24, 2012 to all shareholders of record as of December 10, 2012.

Katahdin Bankshares Corp. stock is quoted on the OTC Markets quote board OTCQB under the symbol KTHN. Current stock information can be found at otcmarkets.com.

Katahdin Trust Company, established in 1918, provides banking services to individuals and businesses from 17 offices in northern and central Maine, online at katahdintrust.com, and operates a commercial loan office in Scarborough. Katahdin Bankshares Corp. was recently recognized by American Banker Magazine as one of the Top 200 Community Banks in the country, for the sixth consecutive year.

The Katahdin Bankshares Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7340

CONTACT: Vicki Smith, Senior Vice President
         Katahdin Trust Company
         Telephone: [phone], Ext. 13511